China, GM & the Industry at Large

In 2000, U.S. auto sales hit 17.4-million units.

In 2000, U.S. auto sales hit 17.4-million units. In 2011, it is likely that Chinese auto sales will top that.

So it goes without saying that there is keen interest in the Chinese market, perhaps even more than had been the case a few years back, when vehicle manufacturers from the U.S. and Europe were seemingly tripping all over themselves trying to setup ventures with Chinese companies.

This week there were a few notable developments on the Chinese auto market scene related to General Motors:

1. The GM Board of Directors had its first-ever meeting outside of the U.S. in Shanghai. While one may have thought that it could have happened at some point in, say, Toronto or Frankfurt, there it was.

2. GM and SAIC Motor Corp. signed an agreement for the co-development of a new electric vehicle architecture. The work in developing the vehicle will be performed in China. It’s not like the two companies aren’t used to working together because they jointly operate the Shanghai-based Pan Asia Technical Automotive Center (PATAC).

3. Daniel Akerson, GM chairman and CEO, opened the first phase of the GM China Advanced Technical Center (ATC) in Shanghai. The facility measures 65,000-square meters and will house the China Science Lab, Vehicle Engineering Lab, Advanced Powertrain Engineering Lab, and Advanced Design Center. Said Akerson, “The ATC is an integral component of GM’s global technology development strategy. As one of GM’s most important and comprehensive technical and design facilities, it will lead GM’s global research and development efforts in targeted areas.”

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GM China Advanced Technical Center in Shanghai

GM is no stranger to China. It has 11 joint ventures there. Two wholly owned subsidiaries. 35,000+ employees. Sells Baojun, Buick, Cadillac, Chevrolet, Jiefang, Opel, and Wuling cars and trucks there. Sold more than 2.35 million vehicles there in 2010—which was the sixth year running that it was the sales leader among global automakers in the country.

So this leads to a question of the effect of China on the rest of the markets GM serves—including the U.S.

Isn’t it possible, or even likely in the not-too-distant future, that the tastes and proclivities of the massive Chinese market will have an effect on the products that are developed not only for that market, but for the rest of the markets the GM serves? And let’s not overlook the fact that other Western OEMs are undertaking similar, if not as extensive, activities there.

When the market is that large, it is hard to underestimate its effects.